Reference no: EM132561938

Specialties Bravo, uses a normal (estimated) costing system. Indirect costs budgeted for the assembly department in 20x2 consisted of the following games:

According to the budgeted production volume, the budgeted hours of Direct work for 20x2 is 40,000 with an estimated cost of $ 160,000. According to the information presented:

Question a) Calculate the default indirect cost rate for 20x2, using the hours on hand direct work as an application basis.

Question b) Calculate the default indirect cost rate for 20x2, using the cost of hand direct work as an application basis.

Question c) Calculate the default indirect cost rate for 20x2, using the hours of machinery as an application base. Suppose the company has the capacity to work 15,000 machine hours.

Question d) What will be the highest cost assigned to production, calculated using the rate with based on labor or based on machine hours? Assume a production of 3,000 units that take 10 hours of labor and 5 hours-machine.

ACCOUNT                                                  AMOUNT

Supervisor Wages                             $ 15,000
Parts and Various Materials                 $ 13,000
Depreciation of factory equipment        $ 56,000
Factory Local Rent                               $ 6,000
Machine accessories                                $ 9,000
Repairs and maintenance                          $ 21,000
TOTAL                                                $ 120,000